A subcommittee representing city and county government and the Canyonlands Health Care Special Service District will be formed soon to study ways to make the Canyonlands Care Center profitable.
The extended-care center lost $350,000 during 2012 and has about $5 million in loan debt, said Joey Allred, vice chairwoman of the Canyonlands Health Care Special Service District.
The decision to form a study group came Friday, Nov. 30, during a joint meeting of the Moab City Council and Grand County Council. A member of both those bodies will be included on the subcommittee along with a designee from the special service district.
They committee will investigate whether the district is eligible to receive funding from sales tax collected in the county. Those at Friday’s meeting said state code is unclear on that point, although similar medical facilities in three other Utah counties are receiving sales tax revenue.
The Grand County Council is considering whether to put the proposed rural health care tax on the June 2013 ballot. Council members have suggested that the proposed tax be one-half of 1 percent, which will be added to most goods sold in Grand County. The tax will not apply to food items, officials have said. County voters must approve the tax, according to state law. County officials have estimated that the tax could raise approximately $750,000 annually.
At issue now is whether the health care service district is considered a state body or a county group, said Allred.
Tourists would pay about 70 percent of the tax revenue, Allred estimated. She said it wouldn’t be charged on groceries.
Grand County Council chairman Gene Ciarus said the county would have to assume the $5 million debt if it took ownership of the care center. He noted that mineral lease money is not being given to the service district, but that amount isn’t enough to cover the facility’s debt.
Moab City Council member Kirstin Peterson suggested the extended-care center keep trying to cut expenses, but acknowledged that measure alone won’t bring the center out of debt.
Grand County Council member Pat Holyoak said private fundraising could be another revenue source.
“Our community desperately wanted a care center,” she said. “It is a heartfelt issue to many people.”
However, Moab Regional Hospital board of directors chairman Mike Bynum brought up the subcommittee option. He called it a tool for determining the service district’s eligibility for tax funding.
“We would like to get at the bottom of it as soon as possible,” he said. “Let’s move forward and get answers.”
Moab Mayor Dave Sakrison supported the idea, saying, “The last thing I want to see is the care center go away. That’s vital to this community.”
Earlier, Sakrison proposed asking for a ruling on tax eligibility from the Utah State Tax Commission and Utah Attorney General Mark Shurtleff.
Grand County Attorney Andrew Fitzgerald told the two councils his brother-in-law owns six health care centers and they can be highly profitable if they offer the right services. That means having residents who need rehabilitative services, which brings in more money, he said.
Moab Regional Hospital currently has beds devoted to such services, although the extended-care center does not. Fitzgerald noted that there is currently a state moratorium against adding more rehabilitative beds, but said local officials could lobby members of the Legislature to remove the moratorium.
He said care centers that offer such services are so lucrative “there are bidding wars throughout the nation when they come up for sale.”